ACP: ACOs – On to the final rule

A guest column by the American College of Physicians, exclusive to

by John Tooker, MD, MBA, MACP

Recently, I commented on cost saving, quality, and care coordination requirements in the proposed rule that physician practices will likely need to meet to be eligible for additional Medicare payments.

The public comment period on the proposed rule for the creation of ACOs has ended. CMS has pledged it will pay close attention to the extensive comments received from consumers, physicians, hospitals, and other interested parties as it formulates the final rule, expected later this summer.

Comments on the ACO proposed rule

There was widespread support for the high level goals — improving health care quality, population health, and lower costs — of the Medicare Shared Savings Program (MSSP) ACO proposal. While consumer groups were strongly supportive of the proposed rule, detailed comments from health care providers have been critical, leaving physicians and hospitals wary of early adoption in forming or joining ACOs.

Highly integrated health care systems, such as the Cleveland Clinic, the Mayo Clinic, Intermountain Healthcare and the Geisinger Health System, organizations thought most likely to succeed as ACOs, expressed skepticism that they will participate in the ACO program as proposed.

All 10 health care systems participating in the CMS Physician Group Practice Demonstration (PGPD) indicated in a letter to CMS that while the group is supportive of the concept of ACOs, they have “serious reservations” about the proposed rule, including the start up costs, attribution requirements and investment return, and therefore would be unlikely to join ACOs. CMS relied heavily on the experience of the PGPD as the basis for the ACO model.

The American College of Physicians (ACP), while also supportive of the proposed rule intent, informed CMS that the proposed requirements are too high a bar for participation by many internal medicine physicians, especially internal medicine specialists in primary and comprehensive care who practice in smaller, independent physician practices.

MedPAC, in its comments, succinctly summarized the voluntary participation requirements (and the opt out FFS alternative) in the proposed rule: “Creating a well-functioning ACO will require a significant investment of money, effort, and time, and the traditional FFS program will still be an attractive alternative — particularly for providers who are accustomed to being rewarded for the volume of services they provide.”

ACOs – On to the final rule

It is clear from the comments on the proposed rule that there is reluctance from sophisticated health systems and from physician groups in establishing ACOs. The burden of establishing an ACO is at present perceived by many to be too high and the rewards too low.

If the changes in the final rule are sufficient to incentivize communities to develop ACOs, establishing an ACO will be a high-stakes endeavor that will require sophisticated and committed leadership, time, and money to move from the current FFS model to a value based purchasing (VBP) care model under the rules set by the MSSP purchaser, Medicare. The private sector will be watching closely as this empirical public sector VBP trial unfolds.

As ACOs develop, who then is going to provide the leadership that will shape health care delivery, community by community, for years to come — physicians, hospitals, or some combination — understanding that the governance (leadership) of each ACO will have the authority (control) and responsibility for its fiscal and clinical operations, including establishing processes that promote patient engagement, evidence-based medicine, care coordination, and quality and cost measure reporting.

Kocher and Sahni, in a NEJM Perspective, say both physicians and hospitals can lead and control ACOs (but with certain limitations of each), dependent upon local market forces.

Every community defines its relationships between physicians and hospitals. The increasing national trend is for physicians to become employed, primarily by hospitals and integrated systems. A recent consultant report projects that in two years only 33% of physicians will be in independent practice.

The Center for Studying Health System Change (HSC) reached a similar conclusion. “Since 2007, in many communities, the trend of hospitals employing physicians has accelerated and broadened to include PCPs, as well as a wider range of specialists.” And for good reason.

While the FFS payment system continues, hospitals can control physicians and physician behavior, viewing physician employment and alignment as a means to gain specialty, subspecialty, and hospital referrals in a FFS payment system and in developing the clinical and financial integration needed to succeed under emerging payment models, such as ACOs.

On the physician side, hospitals employing physicians will need physician leadership and expertise to develop ACO ambulatory care and care coordination capabilities. There will also likely be a restructuring of the collaborative relationship between primary care physicians and their subspecialty colleagues, given the prominence of primary care as the foundation for ACO care delivery.

While the short term expectations of CMS are high in promulgating the final rule, it is important for the success of ACOs that we take the long view of accountable care as a means to improve care and population health while lowering the per capita costs of care. The final rule will not be perfect but if successful will meet the policy goals of the MPPS program while incentivizing well-designed and implemented ACOs to succeed, and provide the empirical data to inform the evolution of the program.

John Tooker is Associate Executive Vice President of the American College of Physicians. His statements do not necessarily reflect official policies of ACP.

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